If this is the case then DFU code has no knowledge or way to interact with the custom locations then, correct? Or am I missing something.

This would be correct, but my feeling is it won't be a huge issue if modders works within the limitations. The mod itself can interact with these locations (as it does have knowledge of them) and can introduce custom encounters, quests and quest actions through the mod system.

It would be a perfect way to introduce self-contained points of interest and other bespoke gameplay without impacting the core game at all. These custom locations could also be used as a hub to send player out using the normal systems to regular dungeons and towns (and ergo connect them to custom guilds, etc.). For example, you could create an Archaeologists "dig site" with bespoke gameplay elements and still direct them to a custom guildhall back in the regular gamespace.

Oh finnaly YES! Best mod ever, thing that I waited for long!
Please guys, any talanted modders, I ask you because I can't do anything, do one of things people waited in that game for years - proper ports in coast cities and towns so it be possible to move on your ship in this cities and ship finnaly not be just a teleport location!
This have impossible limits of ideas - farms around cities, rivers and roards with bridges, elevations and new blicks in cities - with all this daggerfall finally get what it lacked before the most - detailed world that enjoyable to explore everywhere!

If this is the case then DFU code has no knowledge or way to interact with the custom locations then, correct? Or am I missing something.

This would be correct, but my feeling is it won't be a huge issue if modders works within the limitations. The mod itself can interact with these locations (as it does have knowledge of them) and can introduce custom encounters, quests and quest actions through the mod system.

It would be a perfect way to introduce self-contained points of interest and other bespoke gameplay without impacting the core game at all. These custom locations could also be used as a hub to send player out using the normal systems to regular dungeons and towns (and ergo connect them to custom guilds, etc.). For example, you could create an Archaeologists "dig site" with bespoke gameplay elements and still direct them to a custom guildhall back in the regular gamespace.

The potential for this in the hands of clever creatives is huge.

I was waiting on something like this to come along. I have some ideas and just being able to place objects was all I needed.

Now we need a mod that makes the ocean an actual ocean and not a giant piece of rock and we are golden.

Interkarma actually made a poll asking people if they wanted this to be a based thing that comes with Daggerfall Unity (as an option ofc), and the response was a pretty solid yes, so this might even be a base game thing.